AFAIK, the issue around me is largely profitability. You can buy up acres if land, chop it up into 1/2ac parcels, quickly build cheap “luxury houses”, and sell them for 2-3x your costs, easily earning $200k+ per house sold (“Coming soon, from the low $400s…!”). And it’s all with fairly minimal regulation, compared to building high-density housing in existing cities. Compare and contrast that with building low- and middle-income high-density housing, where you’re going to end up managing it as apartments (probably not condos; that’s uncommon in my area); that means that you’re in the red for a larger number of years before you pay back the initial costs of construction, since the profitability comes through rents.
Maybe I’m wrong; all I can comment on is the kind of building that I’m seeing in my area, and the way that the closest city–which was originally about 90 minutes away–is now alarmingly close.
Phil_in_here@lemmy.ca 6 days ago
I don’t think anyone wants to make a brand new condo and try to full it full of fresh immigrants that other businesses are exploiting to pay less.
They want to develop 1 set of condos they can sell for $300k+ rather than 3 sets for $100k
Thorry84@feddit.nl 6 days ago
Yeah this is the biggest issue.
The way most housing gets built where I live it works like this: A company handles the project management, buying the land, getting the permits, hiring the builders, doing the marketing/sales etc. This costs a HUGE amount of money, which they don’t have. So these projects get designed on paper and then sold to investors. These put in a big amount of money, with the expectation of the project making money in the sales of the housing in the end. This means they can often double their entry in a couple of years, which is really good in terms of investments. As the investors want to make as much money as possible, the company designing the housing have incentives to not only make the houses as dense as possible, but also as expensive as possible. Their margins in percent are about the same no matter the house, so a more expensive house makes them more money. This leads to really big expensive homes crammed together in either high rises or plots. It’s really dumb as well since detached homes are worth more, they build homes with like 2 meter between them. The biggest issue is, only rich people can afford these homes. Even though more homes are built, the majority of people looking to buy a home can’t afford these. Homes also get sold to investors again, to rent out as the house itself appreciates in value. These expensive homes also have the effect of driving up property prices in the area, which leads to more expensive houses and higher taxes.
In the end, it’s only the rich that profit. They get the good investment projects, making them even more rich. They get to buy the expensive new homes to live in. They get to buy the homes to rent out and use as an investment vehicle.
Some places have made them build cheaper homes as well, if they want to get the permit. But it’s not enough. We need to be building practical affordable homes, but we don’t cause the people putting up the money to build stuff don’t want to.
Phil_in_here@lemmy.ca 6 days ago
If only we had some sort of public entity that could fund housing investments with little to no financial gain, but great gains to public support and well-being that was also in charge of controlling and permitting immigration rates so that the two could be balanced…
Cryophilia@lemmy.world 6 days ago
Yeah, immigrants would be better served by apartments
Phil_in_here@lemmy.ca 6 days ago
No. No, that’s not it at all.
Immigrants would be better served by unprofitable low income housing, not feeding their meager scraps to pay artificially inflated rent prices to an offshore real estate investment company.
Cryophilia@lemmy.world 5 days ago
Well duh. In fact, they’d be better served by FREE housing!
In the realm of realistic solutions, apartments.